Delta increases frequent flyer-backed debt sale to $9 billion

Key Points
  • Delta is increasing its debt sale to $9 billion from $6.5 billion planned.
  • It's the latest U.S. airline to tap a loyalty program to back debt.
  • Delta has said the program has been resilient thanks to credit card spending while many travelers stay home.
The nose of a Delta Air Lines Boeing 777-200ER dedicated to David C. Garrett Jr, former CEO of the airline is seen at the Narita airport.
Fabrizio Gandolfo | SOPA Images | Getty Images

Delta Air Lines is raising $9 billion in a massive debt sale backed by its frequent flyer program, the latest large offering by an airline grappling with the coronavirus pandemic's impact on travel demand.

The amount is nearly 40% more than the $6.5 billion Delta said earlier this week it intended to raise. The Atlanta-based carrier is burning about $27 million a day as the pandemic continues to sap travel demand, CFO Paul Jacobson said at an investor conference last week.

Airlines are increasingly turning to their loyalty programs to raise cash after revenue from air travel dropped sharply this year. United Airlines is using its MileagePlus program to back new debt, while American Airlines plans to use its AAdvantage program as collateral for a government loan. 

Delta shares lost 1.8% to end the day at $33.96.